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Stephanie Streeter thinks Libbey Inc. has the potential to grow faster in the coming years than the 125-year old glassware company has in a long time.
A year and a half into the job, the 55-year-old chief executive officer has developed and launched a new strategic plan, revamped Libbey’s leadership structure, and honed in on reducing costs and debt.
Ms. Streeter says Libbey is able to respond much more quickly to market demands. The company is doing better, she told The Blade, at focusing on “making what will sell and not selling what we make.”
She seems particularly excited about two soon-to-launch consumer lines — a nostalgic fountain shop line and a country chic hillbilly line featuring whimsical items such as mason jar styled drinking mugs. Libbey also recently added to its high-end offering by becoming the exclusive U.S. foodservice distributor for Spiegelau and Nachtmann, European-based companies that make an assortment of serving glasses and other wares used in finer dining restaurants.
Based in Toledo, Libbey is one of the largest manufacturers of glass tableware in the world, employing approximately 7,000 people worldwide. About two-thirds of those people are employed outside the United States. In the United States, Libbey has manufacturing plants in Toledo and Shreveport, La. The company also has manufacturing plants in China, Mexico, the Netherlands, and Portugal.
Libbey says its tableware, ceramic dinnerware, and metal flatware and service sells in more than 100 countries. Its competitors include France-based ARC International, New York's Oneida Ltd., and Anchor Hocking Co. in Lancaster, Ohio.
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Ms. Streeter took over as the company’s chief executive officer in August, 2011, moving here with her husband, Ed, and the couple's now 5-year-old twins. She said last week her family has settled well into the area.
"When the kids are happy, Mom and Dad are happy," she said. "They’re thriving. We like it here. It’s an easy place to like."
Before coming to Libbey, she had a yearlong stint as interim chief executive officer of the U.S. Olympic Committee. Before that she was chief executive officer of Banta Corp., a printing and supply chain management company based in Wisconsin, from 2002 until it was acquired by R.R. Donnelley & Sons in 2007. She is a graduate of Stanford University, where she lettered all four years in basketball.
At Libbey, she became the second person -- after John Meier -- to lead the company since it was spun off from Owens-Illinois Inc. in 1993. Her first order of business was to learn.
“I’ve been in businesses where somebody came in new and immediately thought they were the smartest person in the room,” Ms. Streeter said in a recent interview at Libbey’s showroom in downtown Toledo. “That just doesn’t work. And it sure doesn’t work in the Midwest.”
Nineteen months and a comprehensive breakdown of the business later, she has solidly put her own stamp on the company, and Libbey is coming off a year of change at her hand.
Ms. Streeter introduced a new strategic plan in July aimed primarily at reducing Libbey’s costs, improving its profitability, and accelerating growth in China. She reorganized company leadership away from a global system into three regions and cut about 9 percent of Libbey’s worldwide management and administrative workforce.
“We took a lot of actions in 2012 on the cost side and on growing and defending our most important businesses, and I think the results in 2012 were pretty impressive once you look past some of the one-time charges that we had,” Ms. Streeter said.
Global sales reached $825 million in 2012, up one percent from 2011 and setting a new record.
Libbey’s reported earnings fell considerably in 2012 compared to 2011, dropping 70 percent from $23.6 million to $7 million. However, Ms. Streeter points out that was influenced by large one-time items such as a $31 million expense in the year's second quarter related to the company's repurchase and redemption of senior notes. On an adjusted basis, Libbey said its 2012 net income was $47.5 million compared to an adjusted $25.8 million in 2011.
The company’s stock climbed almost 52 percent over the course of the year, going from $12.74 per share to $19.35 per share. Shares have fallen back somewhat in 2013, however, with the stock down about 6 percent year to date.
Among the first issues Ms. Streeter identified to be addressed was the company's debt.
“It was a really big deal,” she said. “Some of that was where the company had come from, in 2009 especially. It’s like a family that goes through a crisis. Once you get back on your feet, you just never want that to happen again. We’re pretty focused on it.”
Libbey announced plans Feb. 21 to call another $45 million worth of senior notes in this year’s second quarter. Ms. Streeter said by the end of 2013, Libbey should be well within its goal range for adjusted debt to raw earnings.
For 2013, the strategic plan again centers on defending and growing Libbey's entrenched business. It also includes some manufacturing changes.
Under the tentative plans, Libbey would stop making some items and move other existing production at its Shreveport, La., facility to plants in Mexico and Toledo.
Ms. Streeter has declined to say exactly what would be discontinued and what would move to Toledo, citing the need to negotiate with the union that represents workers in Shreveport, but said the move would not create new jobs in Toledo. About 200 workers in Shreveport are expected to lose their jobs, though Libbey doesn't say how many workers are at each of it's plants. Toledo is the larger of the two, however.
In an update last week, Arnold Ursaner, an analyst who is president of CJS Securities Inc., in White Plains, N.Y., wrote that "2012 was a very successful year in the transformation of Libbey."
In a phone interview with The Blade on Thursday, Mr. Ursaner said Ms. Streeter has identified a number of cost-saving initiatives.
"While some of these decisions have involved difficult choices by forcing some reductions in labor, it also appears she's tightened the chain of command to have more direct control," he said.
He noted many of her decisions are aimed at making the company more competitive globally, and that some of it seems to be working.
"It is in the early stages of success," he said. "If you think about the demand for their products, there are limits to how much more the mature markets will grow and it will be cyclical."
Areas such as Latin America and Asia/Pacific are more ripe for growth, he said. That's what Libbey's strategic plan has focused on.
While part of Libbey's plan in 2013 is increasing production capacity in its low-cost countries, Ms. Streeter said last week the Toledo plant does play into the company’s long-term plans.
“We’re committed to American production,” she said. “We need to make it more cost competitive, but our customers are here, the foundation of the company is here, we’ve been in Toledo for 125 years. I hope we’re here for another 125.”
That’s assured for at least the next 14. Libbey signed a new lease last summer to maintain its headquarters in the Toledo Edison Plaza downtown through 2027. It also signed five-year leases for its Libbey Glass Factory Outlet store at the Erie Street Market and its Libbey Glass Showroom at 335 N. St. Clair St. She said the state, Mayor Mike Bell, and Jobs Ohio all have been supportive to Libbey staying in Toledo.
And as Libbey prepares to celebrate its 125th anniversary this year, Ms. Streeter said the company can look both back and forward to see what Toledo offers.
"Edward Drummond Libbey moved his company here and for all the same reasons that we’re looking at now -- to become more competitive," she said. "That legacy and his innovation and his contributions to the entire industry, we hope to keep replicating that. I think it’s really important. The legacy of our company is critical to how we view ourselves.”
Though growing in China is a specific point in the company’s strategic plan, Ms. Streeter also sees growth opportunities in Latin America, and in the United States and Canada, especially on the high-end side.
“We think that if we really execute around our plan, once we get some fundamentals in place, that we can grow faster than the company has grown in a long time,” she said.
China, does, however, have huge growth potential for Libbey.
“Domestic China is growing in every way,” she said. “It’s growing in food service, it’s growing in retail, it’s growing in [business to business]. With our factory in Langfang we’re able to service all of those. I think we've done a terrific job in increasing distribution there.”
Ms. Streeter said Libbey started 2012 with 12 distributors in China. By the end of the year, there were more than 40.
She also said the company’s senior management team in China — a team made up almost exclusively of Chinese natives — is a strength.
“I think that’s really important in terms of understanding your customers, understanding how the market’s going to grow, being able to service it. Just what's required to operate is very different than it is here,” she said. “I think that gives us an advantage.”
Libby's sales in domestic China were up 21 percent in 2012, the company said.
Contact Tyrel Linkhorn at: email@example.com or 419-724-6134.